MOSERS Board Votes to Drop Staff Bonuses

January 24, 2010 ( - The Missouri State Employees Retirement System (MOSERS) board voted 8-1 Thursday to discontinue bonuses and automatic cost-of-living raises for the system's 72 employees.

 According to a report in the St. Louis Post-Dispatch, MOSERS Executive Director Gary Findlay said anything that can be termed a bonus is “poison” in the current economic climate and hurts the image of the retirement system, the Post-Dispatch reported.      

 Investment staff bonuses were based on how well the plan’s investments performed over five years compared with similar portfolios. According to the Associated Press, investment staff got bonuses worth between $22,000 and $29,4000, while operations staff members received up to 10% of their salaries.  Last July state budget cuts led the Missouri retirement system to put on hold $162,258 in staff bonuses (see MOSERS Puts Hold on Operations Staff Bonuses).        

 “By any objective standard, MOSERS is the best fund in the country,” said Senator Jason Crowell, a Cape Girardeau Republican who cast the lone dissenting board vote, according to the AP.  He said the board should not change its policy based on “newspaper articles and political speeches,” and said taxpayers could ultimately lose money if the system’s rate of return fell because talented staffers left.      

Governor Jay Nixon has called the bonuses “unconscionable,” given the state’s budget cuts and lack of raises for other state employees (see  Public Fund Incentives Draw Fire, Focus).   

Sensitive Issue

 The issue has been a sensitive one for many public pension systems since the sharp downturn in the markets and the sluggish economy – with many public pensions outperforming their benchmarks, but still losing money (see STRS Reneges on Investment Staff Bonuses,CalPERS, CalSTRS Continue Money Manager Bonuses , PERA Drops 2008 Money Manager Incentive Pay , MO Governor Unhappy about Retirement System Bonuses).      

MOSERS, which was recognized as PLANSPONSOR’s Public Plan Sponsor of the Year in 2008 (see  Public Plan Sponsor of the Year: State of Missouri: “Show Me” State  ), was acknowledged for measuring “just about everything it does in its customer service for participants and retirees.” The retirement system covers about 55,000 state employees and 30,000 retirees.